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Michael Sill
Michael Sill, Mentor Education

Financial advisers under ASIC investigation

5 June 2015

ASIC has revealed that four current CBA financial advisers are under investigation as part of their enforcement activity.

ASIC confirmed that the four unnamed financial advisers are under scrutiny for improprieties in the bank’s financial advice subsidiaries. A senior ASIC official appeared before the Senate Economics Legislation Committee in Canberra recently and was asked to provide an update on the total number of CBA-aligned financial advisers who have received banning orders or other punitive action.

ASIC commissioner Kathy Armour answered questions in response to a query from Senator John Williams that, “five financial advisers had been banned, with “three receiving EUs, and three removing themselves from the industry.” She also said that ASIC had also, “subsequently banned another adviser in relation to his conduct at a subsequent licensee, but he came to our attention because of misconduct in the CBA group so that came out of that and we are still looking at about four CBA advisers.”

Peter Kell, the Deputy chair ASIC also adding that, “there has therefore been a total of nine CBA advisers banned, with more to come”.

This scrutiny of the financial advisers follows a recent report that indicated the number of CBA customers concerned they have been given bad financial advice has extended to 22,000, with $560,000 compensation offered so far.

The report says there have now been 22,435 expressions of interest in a review after it was set up after it emerged many customers lost millions of dollars due to dubious practices by some financial advisers between 2003 and 2012. The financial amounts involved in the compensation offers to date totals $562,500, including $79,700 accepted and paid to customers and $483,000 not yet accepted or rejected.

2 Comments

  • Greg
    June 5, 2015 at 1:21 pm

    I sent this to the Ombudsman
    Dear Ombudsman,
    This is an official complaint: I asked ASIC’s Freedom of Information department to supply the names of the financial advisers who were sacked by the Commonwealth Bank for fraud, and are now operating as financial advisers at other financial institutions. I want to invest some money. I need an adviser. I have to choose one. I want to be able to check that the adviser I choose isn’t a fraudster. I cannot check without the names. The attachment is the reply from FOI’s Mr Abramo Martinelli. He is pretending to not know what I want. This is verbatim from his letter: ‘By letter dated 20 May 2015 you were notified that your request did not comply with section 15(2)(b) of the FOI Act which relevantly provides that a request must provide such information concerning the document as is reasonably necessary to enable a responsible officer of an agency to identify it. Section 24AA (1)(b) of the FOI Act provides that a practical refusal reasons exists in relation to a request if the request does not satisfy the requirement in paragraph 15(2)(b).’ Is Mr Martinelli stupid? The request was for names of advisers. I provided sufficient information to enable a ‘responsible’ 12-year-old kid to identify the document that contains the names.

    • Michael Sill
      Michael Sill
      June 9, 2015 at 3:20 pm

      You have a right to find a suitably qualified and ethical financial planner. And despite the bad publicity around a small minority, there is a large pool of 20,000 financial planners in Australia to choose from. To safe guard yourself, email, call or look at the find-an-adviser section on the websites to one of the industry associations – AFA or FPA – and select three that is conveniently close, has the qualifications and experience you are seeking. Then email each and request their Financial Services Guide which will provide you with their profile and the profile of the dealer group they belong to, paying particular attention to how long they have been with that dealer group. (If they have been with their dealer group for more than 2 years, then they do not belong to the group of advisers you are worried about). Finally, meet and interview all three and choose the one who you feel suits your needs the best.

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